1. Field of the Invention
The present invention relates generally to a system and method for managing an auction. More specifically, a system and method for matching multi-attribute auction bids to maximize an overall surplus are disclosed.
2. Description of Related Art
In many conventional auctions, both online and off, an auction mechanism manages negotiations between a single seller and multiple buyers, for example, for a particular good or service in a given transaction. The good or service is typically completely defined such that price of the good or service is the only variable and thus the only negotiable attribute.
The use of online auctions as a dynamic pricing mechanism for purchasing and selling goods and services has recently experienced a significant boom, resulting in the creation of new commerce channels. Online auctions offer real-time, on-the-fly matching of prices to market conditions while, to a large extent, eliminating barriers of time and geography.
In some cases, a buyer and/or a seller may wish to negotiate non-price attributes of the good or service, particularly in business-to-business transactions. The price of the good or service may be dependent at least in part upon these non-price attributes. Such multi-attribute negotiation or auction may be particularly useful and beneficial in, for example, procurement transactions. Further, such multi-attribute or multidimensional negotiation or auction may be among multiple sellers and multiple buyers. However, conventional online auction mechanisms do not provide for collection of multi-attribute bids from buyers and sellers nor do they provide for optimal clearing of such multi-attribute buyer and seller bids.
What is needed is a system and method for allowing systematic and simultaneous negotiation in multiple dimensions. It is desirable to provide a system and method for collecting multi-attribute bids from buyers and sellers. Ideally, each attribute of the bid collected from buyers and sellers is specified in relation to a uniform quantification unit. It is further desirable to provide a system and method for automated clearing of the multi-attribute buyer and seller bids to result in an optimal matching of buyer and seller bids.